Commission Advising at the Public Utility Commission of Texas have posted a draft order that would dismiss AEP Texas' application to install two batteries on its distribution system, and Chairman DeAnn Walker has issued a memo with proposed changes to the draft order

The draft order, as modified by Walker's memo, would state that, "The laws and rules applicable to the electric industry within ERCOT are based on the proposition, generally, that electricity will be bought and sold. The use of unaccounted-for-energy (UFE) in the manner proposed by AEP in this proceeding raises difficult and troubling issues. Further, the use of UFE in the manner proposed makes any attempt to apply existing rules more difficult. Thus, the parties in this docket engaged in complex arguments to account for the proposed use of UFE in a framework of market rules."

The draft order, as modified by Walker's memo, would state that, "It may be that these two batteries would likely have minimal impacts to the ERCOT market. However, if AEP's approach were approved, it is likely that batteries would proliferate and the impacts on the electric market would be magnified. Moreover, batteries may give benefits to some segments of the electric market, but may also be detrimental to other segments. Given the limited focus of the evidence presented in this docket, the impact upon the wholesale and retail markets in ERCOT cannot be determined; but some parties argue that it could be considerable, even disruptive of the current market. Thus, this proceeding identified a potential for energy-storage devices to disrupt the ERCOT market under the current regulatory framework and therefore the need to develop new rules and procedures."

The draft order, as modified by Walker's memo, would direct Commission Staff to open a project in which the necessary policy issues may be addressed and the appropriate regulatory structure can be developed through a future rulemaking.

The draft order, as modified by Walker's memo, would state, "The Commission recognizes the need to move forward to establish a framework that will allow promising new technologies to cost-effectively address distribution quality issues without interfering with the electric market. The rulemaking should consider issues raised in this case and the potential impact of new technologies on the competitive retail market and the energy-only wholesale market in ERCOT. The rulemaking should specifically address the manner in which to treat the energy consumed by batteries and other new technologies. The Commission will not prejudge issues in this docket; however, the use of UFE in the manner proposed by AEP is questionable. The rulemaking should also address whether certification should be required for energy-storage devices and new technologies."